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Municipal Bonds

Municipal bond conditions

Bond Market Matters

Tue, 05/03/2011 - 7:13am -- editor
Site Section: 
Bonds
Municipal Bonds
Corporate Bonds
Treasuries

[[wysiwyg_imageupload:2232:]]By Levente Mady

The bond market retained its solid bid again last week.  Another Fed meeting and another Treasury debt auction cycle could do not a thing to dent the spirits of Treasury Bond buyers.  While the QEII program continues to sop up some of the supply and - contrary to popular belief - the foreign Central Banks continue to buy bonds, at the end of the day there were more than enough additional buyers to keep the prices moving higher.  Excess liquidity still seems to be abundant as stocks, bonds, precious metals, foreign currencies, etc. all continue to march higher.

Bond Market matters

Mon, 03/07/2011 - 2:53pm -- editor
Topics: 
Bonds
Interest Rates
Site Section: 
Bonds
Municipal Bonds

[[wysiwyg_imageupload:1887:]]By Levente Mady

The bond market traded with a bullish tone early in the week, but could not break through resistance.  As a result it settled back into the middle of the recent trading range and looks content to continue to chop sideways.  The roaring commodity markets have certainly had a muted impact on bonds as the market appears to believe Ben Bernanke’s remarks that the upheaval in oil, silver, cotton, etc. should be just a temporary blip.  Last I checked, the Fed had a less than perfect track record predicting market impacts.  I am not sure if we should expect a higher success rate this time.

A Municipal Score Card

Thu, 02/24/2011 - 7:45am -- editor
Topics: 
Debt
Austerity
municipal bonds
Budgets
Muni bonds
States
Site Section: 
Bonds
Municipal Bonds

By Fred Sheehan

Meredith Whitney has kicked up a storm with her 600-page, municipal-bond report. She was one of the first analysts on Wall Street who warned the banks were going to topple well before they toppled. (Standard & Poor's downgraded Bear Stearns three notches - to BBB - on March 14, 2008, two days before J.P. Morgan acquired Bear's carcass.) Whitney told 60 Minutes on December 19, 2010: "You could see...50 to 100 sizable [municipal] defaults.... This will amount to hundreds of billions of dollars' worth of defaults." The municipal bond CABAL (issuers, fund managers, analysts, the municipalities) denounced Whitney and her predictions.

Munis Will Be This Year's Drama

Andy's picture
Thu, 01/27/2011 - 9:32pm -- Andy
Topics: 
George Soros

[[wysiwyg_imageupload:1500:]]

In a candid interview with CNBC, Soros gives his 2 cents on states finances and the muni implosion. It is very similar to what happened in Europe:

  • The states cannot issue currency (they cannot print money)
  • The states are too indebted
  • They cannot tax their citizens any more.

What is interesting to note is that Soros does NOT think that the federal government will be there to rescue them. If this is the case, expect not only state budgets to face enormous austerity, expect state pension funds to implode.

On Europe, Germany and a few other places are in good shape; but others, noticeably those in the southern portion (the mediterranean and baltic states), will fall further and further behind. Our thoughts exactly and we watch with great trepidation. This is what world wars are made of.

Moody's: Credit Stress in Muni Market is Real

Andy's picture
Fri, 01/14/2011 - 2:20pm -- Andy
Topics: 
States

[[wysiwyg_imageupload:1302:]]Robert Kurtter, Moody's public finance managing director:

Credit stress is real in the muni sector. State and local government are facing unprecedented credit stress. The Great Recession is over. The recovery is tepid. State and local governments are lagging. And with the demise of the federal fiscal stimulus, 2011 is going to be a very stressful year for state and local government.

To be honest, these problems are broad-spread across the country. There isn't anywhere that is exempt from these problems.

We don't see any state governments defaulting. We don't see any large rated cities or counties across the country defaulting, [but] two-thirds of the issuers in the muni-market are unrated [and] they're small; they're weak.

[Moody's] believes that the problem is messy, but manageable.

 

Muni-bond Panic to Weigh on Stocks

Thu, 01/13/2011 - 10:50pm -- editor
Topics: 
Bonds
Stocks
Muni bonds
Site Section: 
Bonds
Municipal Bonds

By Deric O. Cadora

Despite the stock market's seemingly inexorable rise, clues to a coming crisis continue to build, promising not only to bring down equity prices sooner than later, but also to make the correction much more severe than most expect. As readers of my Member Letter know, I have been anticipating a dollar crisis to visit markets sometime in the first half of 2011, spurred by an exodus from bonds as the Federal Reserve continues its malfeasant policies. In now seems the dollar crisis will be paired with a panic in the municipal bond market.

One Last Look at State and Local Finances

Tue, 01/04/2011 - 10:34pm -- editor
Topics: 
Bonds
Municipalities
States
Municapal Bonds
Site Section: 
Bonds
Municipal Bonds

By John Rubino

The slow-motion state and local train wreck is becoming old news before it even happens. So this is our last look at the subject for a while, I promise. But two recent articles are must-reads. The first is from Manhattan Institute senior fellow Steven Malanga on the increasingly brazen tricks that states are playing on their creditors and citizens. The second is about how pension obligations are leading cities to make some really badly-timed tax increases.

Municipal Debt Threatens US Economy

Tue, 01/04/2011 - 5:41pm -- editor
Topics: 
Bonds
municipal bonds
Municipalities
States
Site Section: 
Bonds
Municipal Bonds

By Rosanne Lim

The debt crisis that has taken down banks and even countries threatens more than 100 American municipalities this year. According to Meredith Whitney who works as a US research analyst, local and state debts are the biggest concerns to the US economy today. It is large enough to derail economic recovery. She said that, "There's not a doubt on my mind that you will see a spate of municipal bond defaults. You can see fifty to a hundred sizable defaults - more. This will amount to hundreds of billions of dollars' worth of defaults".

We Remain Firmly Bullish

Sun, 01/02/2011 - 10:23pm -- editor
Topics: 
Stocks
Site Section: 
Bonds
Municipal Bonds

By Tom Madell

Many of us might have held back on investing in stocks, either a little or very much so, over the past few years on the assumption that things have been just too precipitous all over the world. Especially for those who held back a great deal or even completely, here are a few things that may have escaped your attention:

Municipal Bonds: Are Dozens of State and Local Governments About to Default?

Sun, 12/26/2010 - 10:24pm -- editor
Topics: 
municipal bonds
Municipalities
Muni bonds
Site Section: 
Bonds
Municipal Bonds

By Michael T. Snyder

In the United States, it is not just the federal government that has a horrific debt problem. Today, state and local governments across America are collectively deeper in debt than they ever have been before. In fact, state and local government debt is now sitting at an all-time high of 22 percent of U.S. GDP. Once upon a time, municipal bonds (used to fund such things as roads, sewer systems and government buildings) were viewed as incredibly safe investments. They were considered to have virtually no risk. But now all of that has changed.

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